By John Lee.

Iraq is well positioned to service its debt obligations, according to an article in Australia’s Investor Daily.

Responding to the question “what’s your view on bonds issued by Iraq’s government?“, Mark Baker writes:

“Iraq is a net external creditor, meaning its external assets are greater than its external liabilities. That means the nation is well positioned to service its debt obligations.”

More here.

(Source: Investor Daily)

The State Company for Military Industries (SCMI), under the authority of Ministry of Industry and Minerals, has invited investors to participate in the following investment opportunity: Transfer of Technology (TOT) and lndustry for hunting-rifle cartridges (Ga 12,16,20).

Interested companies can obtain all the documents and tender conditions from the commercial department in the head office of SCMI located in Baghdad, Al-Waziraya (beside oil institute) against 250000 IQD (not refundable).

The date of tender announcement is valid for the period of 30 days from the announcement date, in case of not submitting any offer through above period , the announcement is considered to be valid another 30 days until we received acceptable offer within one calendar year.

(Source: NIC)

Advertising Feature

Rabee Securities Iraq Stock Exchange (ISX) market report (week ending: 23rd January 2020).

Please click here to download a table of listed companies and their associated ticker codes.

The RSISX index ended the week at IQD625 (-4.4%) / $663 (-4.4%) (weekly change) (-5.2% and -5.4% YTD change, respectively). The number of week traded shares was 7.7 bn and the weekly trading volume was IQD30.2 bn ($24.7 mn).

ISX Company Announcements

  • ISX will suspend trading of United Bank (BUND) starting Sunday Jan. 26, 2020 if the company fails to explain why the prices touched the lower limit on Jan. 22, 2020 and Jan. 23, 2020.
  • Al-Mosul for Funfairs (SMOF) will hold a GA on Feb. 12, 2020 to discuss the utilization of the external expansion land with an area of 36 acres in a long-term rental method for a period of 22 years. The company will not be suspended from trading.
  • The depositing procedures of Al Mustashar Islamic Bank for Investment & Finance (BMUI) started on Jan. 22, 2020. The company will start trading on Feb. 12, 2020.
  • The depositing procedures of Ibdaa Al-Sharq Al-Awsat General Contracting & Investment (SIBD) started on Jan. 19, 2020. The company will start trading on Feb. 9, 2020.
  • ISX will suspend trading of International Islamic Bank (BINT) starting Jan. 28, 2020 due to the GA that will be held on Feb. 2, 2020 to discuss merging with Ur Islamic Bank. The bank will keep its name. BINT will also discuss to increase the capital from IQD100 bn to IQD250 bn through selling its shares to the Turkish Company “Bayt Al-Tamweel – House of Fund International Company” without having to put the shares for public subscription according to article 56/ forth.
  • Al Mustashar Islamic Bank for Investment & Finance (BMUI) completed the procedures of its capital increase from IQD100 bn to IQD150 bn, and will start trading after depositing and activating 5% of the listed shares or after 21 days of depositing the company’s shares.
  • ISX suspended trading of Iraqi Middle East Investment Bank (BIME) starting Jan. 21, 2020 due to the AGM that will be held on Jan. 25, 2020 to discuss and approve 2017 and 2018 annual financial statements.
  • Al-Ameen Estate Investment (SAEI) will hold a GA on Feb. 3, 2020 to discuss the process of selling the company’s properties located in Baghdad. The company will not be suspended from trading.
  • Region Trade Bank for Investment and Finance (BRTB) resumed trading on Jan. 19, 2020 due to fulfilling ISX request to provide its quarterly financial statements.
  • Al Taif Islamic Bank for Investment & Finance (BTIB) invited the community / people for the public subscription.
  • Cross transactions: 2.4 bn shares of Asiacell (TASC) on Jan. 21, 2020, which represents 0.8% of TASC’s capital.

Advertising Feature

Rabee Securities Iraq Stock Exchange (ISX) market report (week ending: 16th January 2020).

Please click here to download a table of listed companies and their associated ticker codes.

The RSISX index ended the week at IQD654 (-2.3%) / $694 (-0.9%) (weekly change) (-0.8% and -1.0% YTD change, respectively). The number of week traded shares was 5.5 bn and the weekly trading volume was IQD6.3 bn ($5.2 mn).

ISX Company Announcements

  • Al Mustashar Islamic Bank for Investment & Finance (BMUI) with a capital of IQD100 bn, will start trading after depositing and activating 5% of the listed shares or after 21 days of depositing the company’s shares.
  • Ibdaa Al-Sharq Al-Awsat General Contracting & Investment (SIBD) with a capital of IQD3 bn, will start trading after depositing and activating 5% of the listed shares or after 21 days of depositing the company’s shares.
  • Region Trade Bank for Investment and Finance (BRTB) will resume trading on Jan. 19, 2020 due to fulfilling ISX request to provide its quarterly financial statements.
  • ISX requested Tourist Village of Mosul dam (HTVM) to provide its AGM minutes for its meeting held on Jan. 12, 2020.
  • Middle East Producing & Marketing – Fish (AMEF) resumed trading on Jan. 16, 2020 due to fulfilling ISX request to provide its annual and quarterly financial statements.
  • New shares of Asia Al Iraq Islamic Bank for Investment (BAIB) from the capital increase to IQD150 bn through 50% rights issue started trading on Jan. 15, 2020.
  • Al-Ameen Estate Investment (SAEI) invited its shareholders to receive their 2018 cash dividend starting Jan. 19. The company will distribute 3% (IQD0.03 dividend per share, 4% dividend yield).
  • ISX suspended trading of the following companies starting Jan. 12, 2020 due to not disclosing their 3M19 financial statements: BDSI, BRTB, HASH, IELI, IICM, IMCI, IMCM, IMPI, ITLI, MTNI, SBAG and VKHF.

The State Company for Petrochemical Industries has announces to all manufacturers and producers companies registered inside & outside of Iraq and all investor s to participate in below project according to the technical specification and commercial conditions which could be obtained from our company at Basra Khor Al-Zubair against non-refundable amount of (2,000,000) Iraqi diners and from our company’s web site : www or M. web site:

Offers should be submitted in three enclosed envelopes with the stamp of company’s name. The first envelop technical offer, second commercial offer and the third contain the following documents .(the financial statements of last two years , certificate of companies registration, and the offers validity should be for not less than three months) these offers should be submitted to our company at Basra khur Al-Zubair or( send the original hard copy through registerd mail by DHL, TNT,…etc to our P. box 933 Basra\Iraq if it is safe & guarantee to reach our company) .

Our company is not committed to accept the lowest offer prices and announcement fee will be paid by the winner.

NOTE: The tender box should be open after (30) days on publication of the announcement in local newspapers. In case we didn’t receive a proper offer we shall re-tender the project until one year.

Bid bond Cost Estimated Closing Date Investment Opportunities Item
400 Million Iraqi dinar 33 BL (30 days) Thirty days from announcement in the publishing local newspapers. Rehabilitation, modernization & Operation and development of Moderate metal Line and auxiliary units of Mysan paper mill 1-

(Source: NIC)

The Iraq Britain Business Council (IBBC) is partnering with Innovest as a Bronze-level eco-system partner for the Ruwwad Al Iraq Platform for young Iraqi Entrepreneurs in 2020.

Ruwwad Al Iraq [“Iraqpreneurs”] is a leading empowerment competition platform by INNOVEST Middle East that embraces young entrepreneurs around Iraq and helps them to start or scale up their businesses.

The competition invites participants to submit their innovative ideas or startup business plans in a bid for financial and capacity building prizes that will bring their dreams alive.

Bassam Falah, CEO of Innovest, said:

Our aim is to build communities of innovators in various sectors, to create new partnerships, to solidify individual and collective efforts, to achieve local, regional and global prosperity and to provide sustainable development to the people and community thus fulfilling their aspirations for a more stable, secure and dignified life.

“We Invest in pre speed funding as well as value creation through in-kind support where we provide startups with the access to resources that are important for their scale up.”

Christophe Michels, MD of IBBC, added:

IBBC are delighted to be supporting the development of Innovest’s start up initiative, as tech and entrepreneurialism are both very much in demand within Iraq as a solution for employment for young people and as a means to modernize the Iraqi social and commercial economy. 

“IBBC is keen to work more closely with tech companies and build a modern Iraq through innovation and applications, so we welcome supporting Innovest and its partnerships to realise these opportunities.

(Source: IBBC)

By Ahmed Tabaqchali, CIO of Asia Frontier Capital (AFC) Iraq Fund.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Stop the Press: Just as this article was being readied for publication, the news came of a US strike in Baghdad that targeted a car carrying Iran’s top general and a senior commander of Iraq’s Paramilitarily Units (PMU). The attack raised the often-discussed spectre of a US-Iran proxy war fought in Iraq. While this is a real possibility, and events are extremely fluid, there a few points that should be taken into account amidst the breathless media coverage:

  • Angry rhetoric from Iran promising fire and brimstone is a given, however, irrespective of all the bluster, Iran cannot afford a direct or indirect full confrontation with the US given the severe weakness of its economy.
  • Iran’s false reading of the US’s hesitation to order a full strike a few months ago led it to push the envelope assuming the US would not retaliate. This attack, demonstrating the extreme extent to which the US will go to defend its interests, will force Iran to re-calculate especially given that the US will be in the midst of an election campaign that will likely see the re-election of the current administration.
  • The dilemma for Iran is the need to retaliate to save face, but without crossing the now abundantly clear US red line, or for that matter starting a wider conflict in the region that it can ill-afford to wage.
  • Iraqi politicians, especially some with sympathies to Iran will, after expressing their perquisite outrage over the violations of sovereignty and threats of revenge, realize that being placed in the same position as that of sanctioned Iran is not advantageous to them, to Iraq, or to Iran.
  • The recent decision by the Iraqi parliament regarding foreign military presence supports the argument made here, in that it’s high on theatrics, but low on substance. It was not a decision to end US military presence, but a typical Iraqi fudge. In essence, it’s a resolution asking the government to do five things, of which two are worth noting: (1) Cancel the request for global coalition support made in 2014; and (2) for the government to work towards ending the presence of all foreign troops. Crucially, the request for global coalition support in 2014 was made by the then government, without parliamentary oversight, and as such could have been cancelled directly by the government, yet it chose to pass the buck to parliament using the excuse of being a caretaker government, but parliament then passed it back. The next steps would involve a lot of noise and bluster, but most likely the resolution would be watered down to an aspiration once the uproar subsides.
  • Finally, within Iran, the government finds itself for the first time in a position to conduct a rational foreign policy, unlike the shadowy operations that were Iran’s effective de-facto foreign policy in the region. This will likely manifest through back channel diplomacy once the dust settles over the next few months.
  • However, the next few weeks are to be marked by a lot of noise and come with spurious threats and counter threats that are reminiscent of the fire and fury that marked the exchanges between the US and North Korea a few years ago, but this time taking place in the most volatile region in the world.

While these events are being played out, it’s worthwhile to look at the Iraq investment story purely on its own merit, especially as the stock market was up +1.5% for the year as of Tuesday 7th January and was building on the trends discussed below. Crucially the market price of the US versus the Iraqi Dinar has only moved up by about +2.0% above the levels for most of the last 20 months. After stabilising in early 2018, It has traded briefly at current elevated levels before the elections in May 2018, during the tanker hits during the summer, and finally, the recent attacks on Saudi oil installations.

(Source: Central Bank of Iraq, Iraqi Foreign Exchange Houses, Asia Frontier Capital)

The Iraqi equity market, as measured by the Rabee Securities RSISX USD Index (RSISUSD), ended December up +2.6% and down –1.3% for the year. The outlook for the Iraqi equity market for 2020 will be shaped by the three events that marked 2019:

  • The equity market’s bottoming following a multi-year bear market
  • The increasing signs, at both a macro and company level, of an economic recovery
  • The repercussions of a youth led protest movement that is bringing with it profound changes (mostly positive) to the Iraq story culturally, politically and economically

Protest movement art in Baghdad’s Tahrir Square

(Source: Art by Yota Namir, Ra’ed Modah & Noor Namir, photo by Mohammed Ghani posted on Baghdad Projects’ Facebook page)

2019’s decline of –1.3% by the Rabee Securities RSISX USD Index (RSISUSD) comes on the back of declines of –15.0% in 2018, –11.8% in 2017, –17.3% in 2016, –22.7% in 2015, and –25.4% in 2014. The small scale of the 2019 decline, the improved market dynamics and the bottoming in trading turnover all point to a bottoming market formation after a brutal bear market that saw the index decline by –66.1% from the peak in early 2014 to the end of 2019.

The first of the market’s improved dynamics is its discriminating nature in evidence throughout the bank rally that started in May 2019, which at the time was led by a stunning rise in Iraq’s leading bank, the Bank of Baghdad (BBOB), which was  up +62.5% in May on hopes it would resume dividend payments for the year. These expectations led to other leading banks such as the National Bank of Iraq (BNOI), Mansour Bank (BMNS) and Commercial Bank of Iraq (BCOI) to join the rally. Subsequently, BBOB’s quarterly earnings results confirmed expectations that it is following through with the recovery in its fortunes that began in 2018 as part of the overall conditions in place for the sector’s future revival. Nevertheless, BBOB did not resume dividend payments for 2018’s earnings. However, unlike in prior years, BBOB declined from the May 2019 peak, yet did not lose all the gains– and more importantly while it pulled the other leading banks up with it in May, it did not drag them lower in the following months. By year end all of the leading banks were meaningfully higher than their pre-May rally lows.

Indexed performance: Bank of Baghdad – BBOB (black), Commercial Bank of Iraq – BCOI (purple), Mansour Bank – BMNS (blue), National Bank of Iraq – BNOI (green)

(Source: Bloomberg, data from 30/04/2019 – 31/12/2019)

The second aspect of the improved market dynamics is the broadening of breadth and the market’s focus on the hopes of an earnings recovery for some of the industrial stocks even before any signs of such recovery can be detected in their earnings report during 2019. This dynamic was evident in small industrial companies and in healthcare providers classified under the industrial sector on the Iraq Stock Exchange (ISX), as discussed here in the last few months. The chart below shows the price action of Al-Mansour Pharmaceuticals Industries (IMAP), Al-Kindi of Veterinary Vaccines Drugs (IKLV), National Chemical & Plastic (INCP), and Metallic & Bicycles Industries (IMIB).

Indexed performance: Al-Mansour Pharmaceuticals Industries- IMAP (green), Al-Kindi of Veterinary Vaccines Drugs- IKLV (black), National Chemical & Plastic – INCP (purple), Metallic & Bicycles Industries -IMIB (blue)

(Source: Bloomberg, data from 31/12/2018 – 31/12/2019)

Normally, cyclical stocks outperform defensive or growth stocks at the start of economic recoveries even though their earnings do not support this outperformance – at least initially. It can be argued that similar dynamics are taking place through the action of cyclicals on the ISX in 2019 such as the banks, mentioned earlier, versus those of market stalwart growth stocks – Pepsi bottler Baghdad Soft Drinks (IBSD) which was down –8% for the year, or for mobile telecom operator Asiacell (TASC) which straddles the cyclical and defensive sectors due to the specifics of its earnings drivers since 2014, which was up +12% in 2019. In contrast, in 2018 both were up +34% and +47% respectively, but the banks were down, such as BBOB –52%, BMNS ­–20%, BNOI –28%, BCOI –4%. Even though the analysis of cyclicals versus growth stocks can only go so far on the ISX, given its illiquidity and limited diversification, the logic of an economic recovery driving cyclical earnings is applicable.

This economic recovery was initially driven by the revival in government spending on goods and services and on wages, the evidence of which was seen in: (1) the upturn of the country’s exports and in new vehicle sales as reported here in October, and (2) the continued growth of broad money, or M2, as a proxy for economic activity as reported here in December.

Data from the Central Bank of Iraq (CBI) on private sector deposits and credit to the private sector support the above trends. These show private sector deposit growth of +12% for the year by end of September 2019 after a few years of no change, while credit to the private sector was up +3% for the period but should accelerate as the economy continues to recover.

(Source: Central Bank of Iraq, Asia Frontier Capital)

The above chart is based on aggregate data for the private sector with the banking system as a whole – both for state banks, and commercial sector banks which accounted in 2018 for 36% of total credit to the private sector and 37% of private sector deposits – and thus do not show the performances of specific commercial banks listed on the ISX.

Drilling down to the company level within the commercial banking sector, the earnings profile of the National Bank of Iraq (BNOI) for the first nine months of 2019 (9M/2019) demonstrates the above macro trends. For BNOI private sector deposits were up +54% in 9M/2019, while credit to the private sector was up +116% for the same period. Its pre-tax earnings for 9M/2019 hold promise for strong full year earnings – a long way to go before recovering to pre-crises levels– but supporting management’s bullish expectations for the year. While it’s not possible to extrapolate much from these results, or to generalize for the sector as a whole from them, they support in any case the argument that the conditions are in place for the sector’s recovery in 2020.

The macro and the micro trends discussed so far are affected by the youth protest movement that dominated all events in Iraq from the 25th of October 2019 after the initial wave of protests in early October. The protest movement forced the political elite to implement reforms that would threaten their interests – contrary to earlier expectations of the opposite. Parliament approved electoral reforms that if made into law would be a meaningful departure from the prior ones that largely allowed the political elite to maintain their oversized influence on successive government formations.

If the hoped-for early elections in 2020 are to be conducted under these electoral reforms they will most likely lead to the formation of the next government with a majority in parliament and parliamentary opposition, as opposed to the case since 2003 in which successive governments were composed of all parties in parliament. This was the root cause of the failures of the past to implement the reconstruction of the country, as each party pursued its own program within its own sphere of influence within an all-inclusive government.

These developments have yet to be played out and a lot of uncertainties remain, yet the near-term effect on the economy would be that the current caretaker government, while unable to act on capital spending plans, will follow up with implementing the current spending element of the 2019 expansionary budget. Moreover, it will continue to implement this budget in 2020 through the upcoming months of pre-election manoeuvring, elections, and post-election government formation. The government has plenty of firepower to fund this spending in the form of a 33-month cumulative surplus of about USD 28.9 bln that will increase in a firmer oil price environment. The most important consequence of this is the sustainable continuation of the consumer led economic recovery discussed in earlier paragraphs.

(Source: Iraq’s Ministry of Oil, Rabee Securities, Asia Frontier Capital)

(Data for oil revenues as of December 2019)

The stock market continues to look through the political developments to the upcoming economic recovery, and while it’s in the early process of forming a base it is worthwhile to point out its continued divergence from its past close relationship with oil revenues (a proxy for the forces driving the economy). This divergence is still at the widest it has been for the last few years and it is showing tentative signs of narrowing this divergence as the above chart shows.

For further reading, here are some interesting, relevant news links related to Iraq:


Please click here to download Ahmed Tabaqchali’s full report in pdf format.


Mr Tabaqchali (@AMTabaqchali) is the CIO of the AFC Iraq Fund, and is an experienced capital markets professional with over 25 years’ experience in US and MENA markets. He is a non-resident Fellow at the Institute of Regional and International Studies (IRIS) at the American University of Iraq-Sulaimani (AUIS), and an Adjunct Assistant Professor at AUIS. He is a board member of the Credit Bank of Iraq.

His comments, opinions and analyses are personal views and are intended to be for informational purposes and general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any fund or security or to adopt any investment strategy. It does not constitute legal or tax or investment advice. The information provided in this material is compiled from sources that are believed to be reliable, but no guarantee is made of its correctness, is rendered as at publication date and may change without notice and it is not intended as a complete analysis of every material fact regarding Iraq, the region, market or investment.

By John Lee.

Simon Hinrichsen, a PhD student at the London School of Economics (LSE), has published an analysis of Iraq’s sovereign debt over the years.

The full 51-page report can be downloaded here.

(Source: LSE)

Iraq’s National Investment Commission (NIC) in coordination with Kirkuk Provincial Investment Commission are pleased to announce the following investment opportunities:

  • Allocating 1200 m² on a part of the land lot no. (100/1 m 56 ceqanian) to construct a commercial complex
  • Allocating 80 Donum on a part of the land lot no. (26/838 m 40 Kirkuk Side) to construct a housing Compound
  • Allocating 15 Donum on a part of the land lot no. (8/13 m 56 H. T) to construct a Passengers’ transport Garage

Investors who are willing to participate are invited to apply by sending their requests to the email address : or by directly visiting Kirkuk Provincial Investment Commission headquarter in Kirkuk.

(Source: NIC)

By John Lee.

An Iraqi researcher has reportedly obtained the first master’s degree in Iraq on the China-proposed Belt and Road Initiative (BRI) [One Belt One Road], by virtue of a thesis titled “Geo-strategic Importance of the Silk Road and its Impacts on the Future of Iraq“.

Khalaf Ayyash Ahmed told Xinhua:

“The importance of the Belt and Road Initiative for Iraq lies in investing in the infrastructure that Iraq needs as a result of its collapse because of the economic sanctions and successive wars.”

Ahmed submitted his thesis to the government-owned Al Iraqia University.

(Source: Xinhua)